The Japanese yen has strengthened following comments from the US Treasury Secretary that addressed inflation and monetary policy issues in Japan.
US Treasury Secretary's Comments
US Treasury Secretary Scott Bessent expressed concern over Japan's inflation problem and the need for a rate hike. "The Japanese have an inflation problem. They are behind the curve, so they are going to be hiking, and they need to get their inflation problem under control," he noted in an interview.
BOJ's Stance and Japan's Inflation
Despite Bessent's hawkish view, Bank of Japan Governor Kazuo Ueda has a differing viewpoint, arguing that there is no rush to raise rates. He noted that core inflation, driven by domestic demand and wages, remains below the 2% target, even though the headline rate exceeds 3%. In July, the BOJ maintained its key rate at 0.5% and gave no indications about future changes.
Dollar's Decline and Bitcoin's Growth
Meanwhile, the US dollar has dropped to multi-week lows as traders speculate on potential rate cuts by the Federal Reserve. Bitcoin has hit a new all-time high of over $124,000, fueled by optimism surrounding upcoming Fed rate cuts.
Thus, tension remains in Japan's economy regarding inflation and interest rates, which may impact currency markets and future investor activities.
